Misconduct by banks and building societies in Britain has cost £53bn in fines, compensation and legal fees over the last 15 years.
The highest penalties accrued to Lloyds which had to put aside £14bn for its misconduct between 2010 and 2014 while at the same time paying £2.1bn in bonuses. The taxpayer still owns about 9% of Lloyds Banking Group.
The payment protection insurance misselling scandal racked up £37.3bn.
The second most costly scandal was the misselling of interest rates swaps which cost nearly £5bn, according to the New City Agenda thinktank which compiled the figures.
“The profitability of UK retail banks has been imperilled by persistent misconduct and an aggressive sales-based culture. This has made every citizen poorer through our pension funds and our ownership of the bailed-out banks,” said John McFall, a former Labour MP and chair of the Treasury select committee.
McFall, one of the co-founders of the thinktank, called on shareholders to take a lead in forcing banks to change their culture, to ensure senior executives are held accountable and demand “significant clawbacks of bonuses” when there is misconduct.
The research focussed on the retail market and so excluded other scandals in investment banking such as rigging the Libor or foreign exchange markets.
Last November the thinktank warned that the culture of banking would take a generation to clean up.
